Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping, and other services to small businesses. HPCS financial records show the following costs for last quarter (QTR 1):

Supplies	$ 14,000
Employee costs	1,015,000
Total administration	455,000

HPCS recorded 4,375 billable hours in QTR 1 and fixed administrative cost was $245,000.

Assuming no change in billable hours in the next quarter (QTR 2), supplies costs are expected to increase by 6 percent. Direct labor costs are expected to increase by 14 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 3 percent.

Required:

1. HPCS expects to bill 5,250 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for next quarter (QTR 2)?
2. Determine the total costs per billable hour for QTR 1 and QTR 2.

HPCS expects to bill 5,250 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for next quarter (QTR 2)?

Note: Do not round intermediate calculations. Round your final answers to whole dollar.

Cost Item	Next Quarter Cost
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total costs

Determine the total costs per billable hour for QTR 1 and QTR 2.

Note: Do not round intermediate calculations. Round your final answers to 2 decimal places.

	Cost per Billable Hour
Last quarter (QTR 1)
Next quarter (QTR 2)